The developers of Victoria’s first four-hour big battery say the costs of building large-scale battery energy storage are coming down in Australia, as demand grows and the dynamics of the global supply chain start to settle.
EnergyAustralia, one of Australia’s big three gentailerw, on Friday turned the first sod on what is its biggest project ever, the 350MW/1,400MWh Wooreen Energy Storage System (WESS) next to the existing gas peaker plant the Jeeralang Power Station.
“This is the biggest project we’ve ever done. It’s around $700 million – it’s the biggest single investment we’ve ever made,” EnergyAustralia managing director Mark Collette said on Friday at the project’s launch.
For Wooreen, as well as for the 50 MW/ 200 MWh Hallett BESS it is building in South Australia, EnergyAustralia is getting a financial leg-up from the federal government’s Capacity Investment Scheme.
But with has plans to build an energy storage portfolio of 1.6 gigawatts by 2030, more big investments are expected to be made in both large-scale batteries and pumped hydro energy storage as the company moves out of coal generation, including with the closure of the Yallourn power station in 2028.
“We’ve certainly seen a big reduction in costs from those first batteries that we did back in 2018, 2019 when the capital costs were much higher,” Collette told Renew Economy from the site of the Wooreen battery on Friday.
“We are getting more confident that the prices are coming down … [that] the forward prices are coming down … and that’s good, because we can deploy more and and we get more megawatt-hours for the same dollars.
“We’re very optimistic and we’re still finding that every time we go to market,” Collette added “We wouldn’t say that it’s a uniform reduction, it’s a bit patchy, but there’s certainly overall downward trend.”
Andy Tang, the vice president of energy storage and optimisation at Wärtsilä Energy, which is supplying the hardware and software for the Wooreen battery, says battery price dynamics are now “normalising” as the cost of raw materials evens out after a couple of years of flux.
“Last year… a couple of years ago, the talk was all about raw materials cost and the spike,” Tang told Renew Economy in an interview on the sidelines of the Wooreen launch.
“The lithium prices have actually stabilsed pretty much… so we think going forward, we’re going to be in a more normal environment than we’ve been in past years, which is slight declines, price decreases, because of technology improvements … [and] more energy per square inch, into into the technology.”
EnergyAustralia, meanwhile, is also looking to one of the oldest energy storage technologies to help firm up its increasingly renewable energy generation portfolio: pumped hydro.
The gentailer’s Lake Lyell Pumped Hydro project is in the feasibility stage with a decision on proceeding likely in the second half of 2025. Like Wooreen, the proposed 335 megawatt (MW) up to eight hours project would be built entirely on EnergyAustralia owned land and would not require any new transmission lines to be built.
EnergyAustralia also has a contract with the Kidston pumped hydro storage project in Queensland – initially announced in 2021 – including full dispatch rights to the facility for up to 30 years and a later option to fully acquire the asset.
“We’re pretty optimistic about the role that [pumped hydro] can play, because it just brings some different features to batteries,” Collette said on Friday.
“We’re a big believer that it’s a mix of technologies that gets us there, not an individual one. That said, the pumped hydro projects are expensive. The guys at Kidston do a great job …I think that’ll probably be the cheapest pumped hydro anyone will see anywhere
“The work we’re doing in New South Wales [on Lake Lyell], they’re just, they’re more expensive projects and so, off the back of that, you want to make sure you’re getting additional benefits.
“There is a benefit to having the big spinning machines and having that … to provide some of the system services in a different way to things like synthetic inertia,” Collette told Renew Economy.
“Having said that, they’re expensive, so we’ll do what we can to bring them to life and just make the best economic choices.”
